Hill v. Kentucky Lottery Corp., 327 S.W.3d 412

Hills filed suit against Kentucky Lottery Corporation (KLC) for unlawful retaliation under KRS 344.280, common law wrongful discharge, and defamation.
First trial verdict in Hills' favor awarded compensatory and punitive damages to Robert and Kim.
KLC sought to set aside the first verdict arguing defamation instruction error and preemption; a faulty January 2003 final judgment was entered reflecting trial verdict amounts.
May 12, 2003, the court issued orders vacating the defective judgments and directing proper judgments; these May 12 judgments were not labeled final and appealable.
August 8, 2003, the trial court set aside the Hills' jury verdicts and granted a new trial on certain issues; a second trial followed with different outcomes, including a defamation verdict for KLC.
On appeal, the Court of Appeals affirmed the second-trial judgment; the Kentucky Supreme Court granted discretionary review to resolve jurisdiction and merits, including preemption, defamation privilege, interest, fees, and punitive damages.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the trial court retained jurisdiction after setting aside the first trial verdict	Hills: final judgments were final; August 8 order voided jurisdiction.	KLC: delay/finality rules divested jurisdiction after May 12 judgments.	The trial court retained jurisdiction to issue the August 8 order; first-verdict judgments were not final.
Whether KRS 344 preempts Hills' wrongful-discharge claim	Hills: wrongful discharge claim based on perjury/public policy is independent of civil-rights preemption.	KLC: preemption applies when statutes underlie both claims.	Common-law wrongful discharge claim not preempted by KRS Chapter 344; Grzyb distinctions apply; reinstated first-trial wrongful-discharge verdicts.
Whether defamation privilege issues invalidated the first verdict and required retrial	Hills: first-trial defamation verdict should stand absent preserved privilege issues.	KLC: absolute or qualified privilege may apply; trial court erred in not providing qualified-privilege instruction.	KLC not entitled to absolute privilege; KLC failed to properly preserve/offer a qualified-privilege instruction; reinstated May 12 verdicts on defamation according to the record.},{

Grzyb v. Evans, 700 S.W.2d 399 (Ky. 1985) (preemption of wrongful discharge when statute underpins both claims)
Firestone Textile Co. Div. v. Meadows, 666 S.W.2d 730 (Ky. 1984) (public policy exceptions to at-will discharge and Firestone framework)
Grzyb, 700 S.W.2d 399, - (-) (as above: preemption and public policy underpinning wrongful discharge)
Northeast Health Management, Inc. v. Cotton, 56 S.W.3d 440 (Ky. App. 2001) (perjury discharge exception to at-will doctrine)
Meyers v. Chapman Printing Co., Inc., 840 S.W.2d 814 (Ky. 1992) (CR 51(3) preservation and instruction standards)
Stringer v. Wal-Mart Stores, Inc., 151 S.W.3d 781 (Ky. 2004) (consolidated damages; harmless error framework for punitive damages)
McCullough, Kentucky Dept. of Corrections v. McCullough, 123 S.W.3d 130 (Ky. 2003) (punitive damages not available for civil rights violations under KRS 344)
Palmore v. Kentucky, - (-) (referenced for punitive damages framework)